Colonial BancGroup Inc.'s new chief executive officer received a rough welcome, getting slapped with a cease-and-desist order after a week on the job.
The $26.4 billion-asset Montgomery, Ala., company said Tuesday that its Colonial Bank had entered the agreement with the Federal Deposit Insurance Corp. and the Alabama State Banking Department. The bank agreed to more regulatory oversight and to raise its Tier 1 leverage ratio to 8% by Sept. 30. The ratio stood at 5.5% at March 30.
Events are moving quickly at Colonial BancGroup, which was hit with a memorandum of understanding late last year over capital concerns. Last month an investment group led by Taylor, Bean & Whitaker Mortgage Corp. agreed to buy a majority stake in the company for $300 million. Last week the board announced that it had selected two directors to succeed the retiring Robert Lowder as its chairman and CEO.
Lewis Beville, the new CEO, said in a press release that it the company looking to address the issues outlined in the order.